Full-Year Continuing Appropriations Act, 2011

Floor Speech

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Mr. DURBIN. Mr. President, I would like to share my perspectives about the funding for agencies and programs under the jurisdiction of the Appropriations Subcommittee on Financial Services and General Government. It has been my privilege to chair this subcommittee for over 4 years.

Overall, the Senate CR includes $23.25 billion for financial services accounts. This represents a cut of $2.268 billion, or 9 percent, below the President's fiscal year 2011 budget request of $25.518 billion.

Compared to the fiscal year 2010 enacted level of $24.355 billion--the amount presently available under the continuing resolution--the funding in the Senate CR is a reduction of over $1.1 billion. This is a cut of over 4 percent below a freeze.

In comparison, the House funding of $20.513 billion for financial services is a cut of $3.84 billion, or 16 percent, below a freeze. This is extreme. It is harmful. It is unacceptable.

The Senate approach, while making significant and difficult cuts, restores $2.737 billion of irresponsible cuts made in H.R. 1. The Senate CR preserves reasonable funding to minimize erosions in critical government programs and prevent harmful setbacks in the delivery of important public services.

Let me take this opportunity to illustrate some of the harsh, detrimental reductions included in H.R. 1, and why the funding recommended in the Senate CR offers a prudent alternative.

For the Treasury's Community Development Financial Institutions Fund, or CDFI, the Senate CR provides $247 million, a freeze to the fiscal year 2010 level. CDFI funds provide seed financing in our nation's most challenged communities for projects such as affordable housing developments, retail developments, small business lending, and community facilities such as day care centers and charter schools.

Each dollar of Federal spending provides confidence for private investors. For example, last year, the Community Investment Corporation, a CDFI in Illinois, leveraged a $1 million Federal grant into $400 million of total financing from 33 banks for affordable housing. CDFI funds offer a lifeline for small businesses and communities that would otherwise have no option to find financing during these tough economic times. CDFI funds are truly the ``last mile'' of financing in struggling communities.

By contrast, H.R. 1 reduces funding for the CDFI Fund to a mere $50 million, a drastic 80-percent reduction below the Senate CR level. If enacted, H.R. 1's cuts to the CDFI Fund would result in the loss of an estimated $1.6 billion in private sector leveraging for investment in America's most challenged communities.

This huge reduction in financing would cause the loss of 19,200 new jobs that would otherwise be created, the loss of 14,100 affordable housing units that would otherwise be built, and the loss of 3,200 small business loans that would otherwise be made. It would be a mistake to enact H.R. 1's cuts to CDFI. The Senate CR level is a responsible way to maintain investment in our Nation's most challenged communities during these tough economic times.

For the Commodity Futures Trading Commission, $286 million is provided in the Senate CR. On the other hand, H.R. 1 decimates the resources for this agency by slashing funding down to a meager $112 million. This is a cut of $57 million, or 33 percent, below a freeze at the current level of $168.8 million. The Senate level supports necessary staffing increases and key information technology investments to help the CFTC better protect the average investor and increase safeguards against excessive speculation.

The House level would prevent the CFTC from meeting its mission to monitor the markets. It would jeopardize CFTC's work to ensure that the ever evolving world of commodity futures--diversified products from grains to gold, from currencies to carbon credits--are free from manipulation, fraud, and abusive trading and sales practices. Futures prices--and CFTC's oversight role--impact what we pay for the basic necessities of everyday life: our food, our clothing, fuel in our vehicles, and heat in our homes. The House sledgehammer cut to the CFTC is irresponsible and irrational.

For the Securities and Exchange Commission, the Senate CR provides $1.3 billion, consistent with the authorized level for fiscal year 2011. These funds support increased legal and investigative staffing for oversight and enforcement responsibilities as well as substantial investments in IT upgrades. By contrast, H.R. 1 cuts resources for the SEC to $1.069 billion. This is a reduction of $41 million, or 4 percent, below a freeze. It is a decrease of $231 million, or 18 percent, below the authorized level.

Among a long list of expected setbacks, the decreased funding in H.R. 1 will severely limit SEC's ability to police the markets and enforce Federal securities laws to protect investors from deceptive financial schemes. It will limit SEC's pursuit of quality complaints, tips, and referrals and will stall investigations.

Less funding will diminish the SEC's ability to conduct public company oversight, review public filings of large financial institutions, and decrease the frequency of reviews of smaller and mid-sized companies to less than once every 3 years. Is this really what we want in the wake of the Wall Street fiasco?

H.R. 1 cuts mean that outmoded technology will languish without critical modernization, leaving the SEC to lag far behind the industries it regulates. SEC will be hampered in its ability to collect the tremendous amounts of market data needed to better identify, address, and prevent activities and events that can disrupt markets and harm investors, such as those that occurred on May 6, 2010--the ``flash crash''. Why supporters of H.R. 1 want to undercut this watchdog agency is hard to comprehend.

For the Small Business Administration, the Senate CR provides $762 million, in essence a freeze at the fiscal year 2010 level due to available carryover balances. In contrast, H.R. 1 reduces SBA's operating budget by $25 million compared to the Senate CR. This cut would reduce staff across the entire SBA. Reducing staff would cause a backlog in loan approvals under SBA's loan programs that support over $20 billion a year in financing for new and expanding small businesses. A loan approval backlog would impose delays and uncertainty in financing for small businesses during a critical time in the Nation's economic recovery.

The cut to SBA would also scale back the ability of SBA's field staff to serve small businesses seeking credit and business counseling resources. This will deprive small businesses of critical ``matchmaking'' connections to banks participating in SBA's loan programs and to counseling programs for starting and growing small businesses. The Senate CR funding for SBA is a responsible alternative to H.R. 1's reckless cut. The Senate CR will keep SBA operational to support American small businesses working towards economic recovery.

For tax law enforcement, the Senate CR provides $5.59 billion to the Internal Revenue Service. It is a modest but rational increase of $87 million, or 1.6 percent, above the fiscal year 2010 enacted level of $5.5 billion. The funding includes critical resources for targeting offshore tax evasion.

In contrast, H.R. 1 cuts tax law enforcement to $5.219 billion, which is $285 million, or 5 percent, below a freeze. Cutting IRS resources is counterintuitive to the goal of reducing the Federal deficit. Under H.R. 1, lost enforcement revenue could surpass well over $4 billion. Reductions under H.R. 1 would necessitate furloughing all enforcement employees for up to 19 business days and/or significant RIFs.

Among other consequences, the H.R. 1 cut means 164,000 fewer individual and business audits, directly affecting the performance of IRS's enforcement revenue efforts and reducing overall compliance. It will mean 8,400 fewer taxpayer appeals case closures, as fewer taxpayers are able to turn to the appeals process to resolve disputed tax controversies.

Moreover, 310 fewer criminal cases will be completed, 216 fewer convictions will be realized, and an estimated $67 million in asset forfeiture revenue will be sacrificed. It also means the discontinuance of fraud cases related to the Return Preparer Program, drug trafficking tax cases, and interagency efforts in coordination with the Justice Department and Drug Enforcement Administration.

For the General Services Administration, the Senate CR would provide $591 million for construction of Federal buildings, providing continuation funding for multiyear, consolidation projects and nearly $398 million for repair of Federal buildings and courthouses. In contrast, H.R. 1 eliminates all funding for Federal building construction and all major repairs for Federal buildings. Overall, the Senate CR reduces GSA programs below fiscal year 2010 levels and by a total of approximately $1 billion below fiscal year 2011 requested levels.

The House approach is irresponsible because it defers Federal construction projects, making them more expensive; results in more Federal leasing, which is more expensive over the long-term than federally owned space; and prevents Federal agencies from operating as efficiently as possible due to delays in moving into new space necessary to meet mission requirements.

In addition, eliminating the construction and repair projects could cost as many as 16,000 private sector jobs in the construction and related industries. It would also delay other benefits associated with Federal capital projects, including economic development and ``multiplier effects'' of infusions of Federal spending into local economies.

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